Question: In a binomial tree with zero interest rate and no dividend, if at each node the stock price can go up much more than when
In a binomial tree with zero interest rate and no dividend, if at each node the stock price can go up much more than when it goes down, what can we infer about the risk-neutral probability?
The risk-neutral probability of going up is higher than 50%.
The risk-neutral probability of going down is higher than 50%.
The risk-neutral probability of going up is equal to 50%.
We cannot infer anything about the risk-neutral probability.
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